In his weekly business finance post our CFO Greg Taylor says that in small business as well as being the expert in your trade or field you also have to be a good record keeper.
Whether you are a plumber, hairdresser, butcher, baker or candlestick maker you are also a record keeper.
Record keeping may not be your strong point but the reality is, if you own a small business good record keeping is essential.
You don’t have to over-complicate it but you do need to get organised and allocate time to it. Set up a simple system that works for you and it will be an easier task. Having a cash book and folders or files for unpaid invoices, paid invoices, paid expenses and unpaid expenses is a good start.
You can use a simple commercial record keeping software system but depending upon your needs, a simple spreadsheet may be enough.
Allocate some time in your diary, preferably weekly, to stay on top the job. That way it won’t take you too much time. Record keeping is also a good way to stay on top of your cash-flow and how your business is going.
If you use an electronic system, make sure you have a back up of it to save you re-entering information if you lose that data for whatever reason.
You also need to make sure you meet statutory requirements. You must keep records of sales, expenses, payments to employees and other matters for at least five years. The Tax office website has the list. You must register for goods and services tax (GST) if your GST turnover will be more than $75,000. You need to issue a Tax Invoice when you bill people. Make sure you get a tax receipt for everything you buy otherwise you cannot claim that expense.
As your business grows you may find you need help from a book-keeper. These costs can generally be a tax deduction. You can also get tips on record keeping from the Tax Office and other Government websites.
Please share your record keeping tips below.
This post is based on Greg's weekly column in the Newcastle Post newspaper.